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What should I be aware of when purchasing a foreclosure?

There are two very important points to consider. The first is that all of the debt that encumbers the preforeclosure property remains against the property until it is sold at the foreclosure auction. This means that any "junior" or subordinate debt stays in place, including trusts, second and perhaps even third mortgages, tax liens, assessments, and judgments. Any of these debts incurred by the owner and secured by the real estate, which may exist against the property, must be paid off. Most of the time, there is only one trust deed or mortgage on a property; however, it is of strict importance that you find out about any other possible debt on the property before you spend too much time and money pursuing a purchase of the property.

The second issue is that only the individuals who are named on the title can sell the property. This seems obvious, but it can go overlooked and valuable time can be wasted. All of the owners of the property must agree to sell it to you before a legal sales transaction can be completed. Make sure that you know who ALL of the owners are and that they are all interested in selling before you start negotiating a deal. Most homes are owned by individuals or couples, so finding them and negotiating with them should be straightforward. Owners who have co-signors or non-resident partners, and owners who have abandoned the property and may have moved out of the area will obviously take additional time and effort to locate, negotiate with, and get documents signed. Just remember that even one deal that nets you thousands of dollars will make your time well spent.

This series of articles is brought to you by A. Mark Argentino and other real estate related resources, including Canadian Real Estate Association CREA and the Ontario Real Estate Association OREA. Back to list of Real Estate Helpful Articles

Whether you are interested in a Power of Sale Property, a Foreclosure Sale or a regular property purchase, I can assist you with all of the complexities when you purchase or sell your next property.  Please don't hesitate to email me If you have any questions or require further information, please send me an email. Thank you, Mark Argentino Read about Power of Sale, Bank Sales and Foreclosure Properties FAQ's Read a very detailed section about Power of Sale and Foreclosure or go back to list of Real Estate Helpful Articles